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Definitely government intervention. It couldn't be the 70% of the economy owned by private sectors.
i wonder how that happened?
Definitely government intervention. It couldn't be the 70% of the economy owned by private sectors.
you're right.
Isn't it your theory that talking negatively about the economy impacts the economy negatively?
I agree with SnC in the aspect that the M$M's are so vocal to what their demonrat buddies say. The republicans has so little voice. It's one thing to say the economy is bad when it really is good. People stop and think about if they really want to spend money. This is primary (yes, in my opinion) that caused the repression. I say reprerssion purposely. I think they wanted this to control the economy more.Your being facetious right?
If we are to blame others for argueing in a negative aspect, then it's the media's fault for pushing a recession until their guy got elected. It's the Dem's fault for Iraq going so bad from 05-07. It's the media's fault we didn't recover faster than we did, for calling it a recession when Bush had 5% unemployment, in 02 I think.
As for the stocks last September, there was a direct immediate correlation to what congress was doing at the time. If you want to blame the republicans, then take it from the viewpoint that they didn't say the economy was bad, but that the bailout was bad for the economy. They didn't cause anything. The domocrats did. At most, they caused a little fear in those few of us who listen, but most of us already shared that viewpoint without having to be told how to think.
If the democrats didn't pass the bailout, the DOW, S&P, and other market indicators wouldn't have dropped like it did, almost with certainty. Like I said about big money investors, they don't listen to the talking heads like the uninformed public does. They have experts that analyze the "what-ifs."
I solidly blame the democrats for the job losses and bad economy. Fear is hard to temper when you have so many pundits saying the same thing about "how bad the Bush economy is." Even though it was good, the fear made it bad.
WC: do you say stuff because you believe it, or do you believe it because you say it?
I gotta tell you: the notion that this recession was caused by an at ude problem is seriously, seriously unhinged.
If you say so.
What was wrong with it before the democrats started downtalking it? Nothing. It wasn't strong, or robust, but it was growing at a slow pace. It simply didn't take much fear to derail it.
Last edited by Wild Cobra; 10-30-2009 at 05:30 PM.
You guys always pimp the ratings of Fox News and Rush Limbaugh.
Disingenuous.
Trillions of dollars sunk into derivatives nobody understood, under the assumption that home prices would never drop, after we built 15 years supply in a 5 year window. A massive, massive debt bubble, with not much real wealth supporting it. What could possibly go wrong?
Irving Fisher explains it well:
@ the LondonBanker link aboveThe public psychology of going into debt for gain passes through several more or less distinct phases: (a) the lure of big prospective dividends or gains in income in the remote future; (b) the hope of selling at a profit, and realising a capital gain in the immediate future; (c) the vogue of reckless promotions, taking advantage of the habituation of the public to great expectations; (d) the development of downright fraud, imposing on a public which had grown credulous and gullible.
Fisher then sums up his theory of debt, deflation and instability in one paragraph:
In summary, we find that: (1) economic changes include steady trends and unsteady occasional disturbances which act as starters for cyclical oscillations of innumerable kinds; (2) among the many occasional disturbances, are new opportunities to invest, especially because of new inventions; (3) these, with other causes, sometimes conspire to lead to a great volume of over-indebtedness; (4) this in turn, leads to attempts to liquidate; (5) these, in turn, lead (unless counteracted by reflation) to falling prices or a swelling dollar; (6) the dollar may swell faster than the number of dollars owed shrinks; (7) in that case, liquidation does not really liquidate but actually aggravates the debts, and the depression grows worse instead of better, as indicated by all nine factors; (8) the ways out are either laissez faire (bankruptcy) or scientific medication (reflation), and reflation might just as well have been applied in the first place.
Lehman and AIG failing on the same weekend caused the fear. Bad talking had nothing to do with that. Massive fiduciary irresponsibility (i.e., very stupid and imprudent business decisions) did.
WH: Who really thought housing prices wouldn't drop?
Nearly everyone who sold MBSs.
I'm honestly not sure who aside from WH humors this . On one hand I admire his patience while on the other I wonder if he's actually sane.
WH, its odd because I feel you're actually more pessimistic than me but yet you engage this crap in an idealistic manner. You sir, are a conundrum.
Declarations of the end of the recession may be premature. All recessions in the past four decades have had at least one positive quarter for GDP, followed by a renewed downturn, points out John Williams, who produces the Shadow Government Statistics (www.shadowstats.com) for his subscribers, who suspect there may be more (or less) to the numbers the government churns out.
Indeed, he writes, some 92% of the third quarter's GDP growth came from non-recurring factors and thus are not sustainable. (Funny how the stock market will ignore non-recurring factors in corporate earnings reports but took those in the GDP report at face value.)
"The estimate of 3.5% annualized real growth for third-quarter GDP included a 1.7% gain from auto sales, a 0.6% gain from new residential construction, and a 0.9% gain from a largely-involuntary inventory buildup, which appears to be understated," Williams writes in subscriber note.
Of course, automobile sales soared at a 56% annual rate with the help of the cash for clunkers while residential construction expanded at a 23% annual rate in the face of massive inventories of unsold and foreclosed homes, courtesy of the first-time homebuyers' tax credit.
"In aggregate, those one-time stimulus or inventory items represented 92% of the reported quarterly growth. The nature of the stimulus-related gains was that they tended to steal business activity from the future. The months ahead are the future. Accordingly, fourth-quarter quarterly GDP change likely will turn negative, again," Williams concludes.
In actuality, part of the GDP growth came from a very slightly slower cutbacks of inventories, explains Stephanie Pomboy of MacroMavens. Inventory liquidation dipped to $130 billion from the record $160 billion in preceding quarter. The GDP math translates this slower rate of decline as a positive, which added a full 1% to the quarter's annualized growth.
Add in the 1% from cash for clunkers and 0.5% for the homebuyer tax credit, and we're left with 1% growth -- of which half came from government spending, she adds. And while business was cutting back inventories, it also reduced capital spending for the fifth straight quarter, which doesn't suggest they're gearing up for future growth.
http://online.barrons.com/article/SB..._hpp_highlight
Yeah but what that article doesn't point out is that the stimulus will be injecting similar amounts into the coming quarters. Sure, auto sales won't be as high in the fourth quarter but the stimulus package will be injecting money elsewhere.
To be clear, I'm not in the camp (does it even exsist?) that says we're out of the woods yet. I'm not sure we'll see a retraction in the fourth Q, however. I do believe stimulus is going to be a major factor in any growth in the short term future - however.
Thanks, kinda.
I'm honestly not sure who aside from WH humors this . On one hand I admire his patience while on the other I wonder if he's actually sane.
What so idealistic about backing up your own claims or responding to simple requests for information?WH, its odd because I feel you're actually more pessimistic than me but yet you engage this crap in an idealistic manner. You sir, are a conundrum.
Even if the posters I reply to don't get it or don't pay attention (and who knows, occasionally they may), others might. No telling what impact may be had there. Responding to clowns, dolts and *low information voters* with reason and courteous attention is not only disarming, it is a good example for others and good practice for oneself. FWD is probably the best on this board at maintaining his equanimity and giving serious, thoughtful replies to very unserious posters. I kind of admire him for that.
Making fun of the ignorance of others is easy, and feeds my vanity; correcting it is hard, and reflects the humility of my own, still very considerable ignorance.
Last edited by Winehole23; 10-30-2009 at 07:21 PM.
Where might the impact be registered going forward? I confess to not knowing very much about it.
In a way, that was the point of the article. GDP growth is due to non-recurring factors, and therefore it is misleading to claim that the recession is "over".
the stimulus is a bonus. unless the bonuses are going to come forever, eventually the underlying problems in the economy need to be fixed.
and the underlying problem is our s game banking system (most notably the central bank).
too bad they bought off Washington a long time ago.
As far as what might be registered if you look at what has been spent so far and what is going foward you see a huge portion of the stimulus is still going to be spent.
So while Cash for Clunkers may be history there are other programs which will take its place. As for what those are I don't have the breakdown but I've looked at some articles at EPI.org with breakdowns.
I don't agree with the premise of your 2nd paragraph however. In order to start economic growth its important to first stop the contraction. To make my point clearer I'll use an analogy of a severe cut. On its own the severe cut may heal, but if we use treatment we can make the healing process move more efficiently. By s ching the wound and providing first aid we can more quickly stop the bleeding and facilitate healing.
Well, the stimulus package is like that s ching and first aid treatment. In essence the argument in the article is that because the wound is s ched that you can't say its healed. Superficially that's a valid point, but in the context of what would have occurred had we not taken action then we can certainly say that healing has started and that it is occurring more efficiently with the added help.
So yes, much of the spending that was facilitated by government funds here is unsustainable, but that spending helped preserve jobs which in turn has positive economic domino effects down the line.
We're not healed, but the wound is obviously healing.
I hear what you're saying WH, but I've been on this board for a lot longer than you have and what i've realized is that there are people worth responding to in a serious manner and there are others whom are simply not worth the effort.
I agree with your analysis on FWDT though. He's always been one of my favorite posters here (but not necessarily for that reason).
Everyone makes this call for him/herself. Rather than making an existential judgment about others (*not worth it*), I prefer simply to state my own preference: sometimes I'd rather not reply.
Not replying is not nearly as entertaining.
You win the gentleman award though.
This begs the question IMO, but I see what you mean.
The coming crash in CRE has me a little spooked.
It wasn't my aim to. I have to live with myself. Golden rule and all that. Courteousness really isn't worth the name if you only extend it to people who you think deserve it.
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